Posted by Shawn Tully, senior editor-at-large
March 28, 2011 5:00 am

Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

A home under construction in Austin. The number of new homes in the pipeline nationwide is quite low.

From his wide-rimmed cowboy hat to his roper boots, Mike Castleman fits moviedom’s image of the lanky Texas rancher. On a recent March evening, Castleman is feeding cattle biscuits to his two pet longhorn steers, Big Buddy and Little Buddy, on his 460-acre Bar Ten Creek Ranch in Dripping Springs, a hamlet outside Austin in the Texas Hill Country. The spread is a medley of meandering streams, craggy cliffs, and centuries-old oaks. But even in this pastoral setting, his mind keeps returning to a subject he knows as well as any expert around: the housing market. “I’m a dirt-road economist who sees what’s happening on the ground, and in 35 years I’ve never seen a shortage of new construction like the one I’m seeing today,” declares Castleman, 70, now offering a biscuit to his miniature donkey Thumper. “The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses. And in most markets the price of new homes is fixin’ to rise, not fall.”

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Seattle Real Estate Tyler Freed

King County and Pierce County Real Estate October 2009
By Tyler Freed
November 19, 2009

In King County the number of active listings is down 3.8% from October 2008. More importantly the number of closed homes has increased 29.7% over the last twelve months, at an average closed price of $421,521. New Construction in King County has an average closed price of $517,545 with closings up 19.6%. New construction starts are definitely down from the year, leading to a decrease in active new construction listings of 18.81%.

Pierce County on the other hand has not seen similar prosperity in the new construction market. Active listings are down 10% and closed new construction homes are approximately 1/6th of the King County increase at 3%. New Listings in Pierce County are down 2.9% and closed sales are up 22%. The median sales price in Pierce County is $237,553.

What is the major factor of the increased sales?

There are many factors due to the increase in closed sales in both counties. The major factor that has spiked sales in the last quarter is the original 8K tax credit. The current home buyer tax credit can be as high as $8,000 on the purchase of a home by a first time buyer. The credit allows for 10% of the purchase price, up to $8,000. That credit has been extended and is now good through April 30th, 2010. As long as a contract is signed and closed before July 1, 2010, the buyer can claim the credit. For members of the Armed Forces who have been deployed outside the U.S. for at least 90 days at some point between Dec 31, 2008, and the cut-off date for the credit (May 1, 2010), the dates that end the period where they can claim the credit are extended to May 1 and July 1, 2011.

Another major factor is the 30-Year Fixed-Rate Mortgages. We have never seen average rates like these. The yearly average as of September was 5.08%, with a high of 5.42% in June and a low of 4.81% in April.

This 2009 Market has seen exceptional interest rates, reduced inventory, and government programs that help buyers with tax relief. The agent population is expecting to see more REO properties released in the beginning of 2010. Hopefully these bank owned homes will not decrease the local market values much more than they already have. If rates continue to stay around 5% and move up buyers are motivated by the $6,500 credit, 2010 could in fact be a much healthier housing market.

About the Author:
For more information on your local area and to learn about the benefits of today’s market conditions visit: http://www.tylerfreed.com

Seattle Real Estate Tyler Freed

Washington State Real Estate Outlook

The Washington state real estate market, just like the market in the rest of the country, is starting to rally. But prices on average statewide are still down from last year, even though this time last year the market had already fallen hard. Washington state, bordered with Idaho on the east, Oregon on to the south, Canada on the north and the Pacific Ocean on its west coast can be a good place to make a real estate investment, however, if you’re willing to think of it as a long-term investment.

Right now, Washington state home sales are up almost 16% from last year, which is good news. But the median price has dropped almost 8%. Since June, sales have been boosted by a tax credit that most experts believed believe is responsible for the surge in sales, and that without the credit, at least half of the sales wouldn’t have been possible.

Though residential real estate is down 5% in King County, it is up 12% in the last five years and up 58% from the last ten years. The increase in sales and decrease in price are median numbers in Washington state real estate, however. Some areas have shown an increase in the sale prices of homes, like in Skamania County where home prices are up an average of almost 7% and Columbia County where the average home selling price is up a whopping 25% over this time last year.

Another good indicator of the Washington state real estate market is the number of building permits applied for as compared to this time last year. This will show the trend over the coming months as the new constructions are completed. Columbia county, where home sale prices have gone up 25%, has only half the building permits applied for as last year. And since new construction is slow and few are building, the home prices there could continue to stay above last’s year’s numbers. The number of sales is also up 25% over last year.

Thurston county, the home of the capital city, Olympia, only had about a 3% increase in median home selling prices, but had a whopping difference in the number of building permit applications. Almost 50% more permits have been applied for by the end of the third quarter of 2009 than in 2008. It’s hard to predict the trends when you have a tri-cities area like Kennewick, Richland and Pasco in Benton and Franklin counties, which are usually grouped together in Washington state real estate circles, with each city showing drastically different numbers.

Benton county has had about 25% fewer sales than this time last year, with a small 13% decrease in permits, but the price has stayed fairly steady, with only a 0.3% increase. Neighboring Franklin county, however, shows about the same numbers, except in new permit applications which are up 45% over last year.

If you plan to invest in Washington state real estate, it’s important that you look at the purchase as a longer-term investment and not something that you’ll try to flip quickly while the market’s still erratic. If you want to purchase a residence in Washington, looking at the numbers in the area you’d like to live can help you get in with an investment that will improve over time.

About the Author:

For more information about the current market or how to take advantage of today’s market visit http://www.tylerfreed.com.

Seattle Real Estate Tyler Freed

This first chart illustrates and confirms that Bonney Lake is still a bedroom community for families, with the owners vs. renter ratio way above the national level.

Here you see that Bonney Lake still has a good mix of newer homes and older homes. The rebuilding of neighborhoods has slowed but new construction has been down all across the state. We are now seeing good signs with the “number of starts” (builders breaking ground) increasing.

This also re-confirms that Bonney Lake is the city where people can get exceptional housing, away from the city under 300K.

Seattle Real Estate Tyler Freed